Feature Post

Understanding ETFs Uses, Returns and Comparison with Mutual Funds and Stocks

 Exchange-Traded Funds (ETFs) have gained popularity among investors for their unique features and benefits. In this blog, we'll explore the uses of ETFs, their potential returns, how they differ from mutual funds and stock investments, and their safety profile. What is an ETF? An ETF is a type of investment fund that trades on stock exchanges, much like individual stocks. It holds a collection of assets, such as stocks, bonds, or commodities, and aims to track the performance of a specific index, sector, or asset class. Uses of ETFs Diversification : ETFs allow investors to gain exposure to a wide range of assets without having to purchase each individually. For instance, an ETF tracking the S&P 500 gives you exposure to 500 different stocks, reducing the risk associated with individual stock investments. Cost Efficiency : ETFs often have lower expense ratios compared to mutual funds. They typically pass on lower management costs to investors since they are often passively man
0

Rule 72

 Rule 72 is the useful Formula for finding how quickly amount will get double in value by discounting or by applying interest rate.

Dividing 72 by interest rate, we can come to know that in how many year given amount will get doubled.

Formula - 

72 / Interest Rate

Where, Interest Rate - Rate of Return on Investment

Lets us understand with example - 

Let suppose financial institution is launching a scheme to give 6% interest on investment. 

So if you will invest 1,00,000/- amount in above given scheme, your investment will get double i.e 2,00,000 in period 72/6 = 12 years

If the same scheme revises the interest rate to 8%, then the same invested amount 1,00,000/- will get double in 72/8= 9 years.  

Comments

Post a Comment